The owners' equity accounts for Freya International are shown here: Common stock ($.50 par value)....................$ 40,000 Capital

Question:

The owners' equity accounts for Freya International are shown here:

Common stock ($.50 par value)....................$ 40,000

Capital surplus.........................................345,000

Retained earnings.....................................748,900

Total owners' equity..............................$1,133,900

a. If Freya stock currently sells for $30 per share and a 10 percent stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change.

b. If Freya declared a 25 percent stock dividend, how would the accounts change?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...